Tax Judgments of High Courts: Annual Case Digest 2023 [Part 1]

This Annual Case Digest analytically summarizes the key stories related to Tax judgements of various High Courts in India reported in Taxscan.in during the year 2023. These stories include judgements and observations of High Courts related to Income Tax, Goods and Service Tax (GST), Excise Duty, Service Tax, Customs Duty, etc.

Rejection of Appeal without Considering Break Down of Vehicle and Generation of New e-way Bill within Three Minutes is ‘too technical’: Calcutta HC M/s. OFB Tech Private Limited vs State of West Bengal &Ors 2023 TAXSCAN (HC) 1044

The Calcutta High Court has held that rejection of the appeal without considering the breakdown of the vehicle and generation of a new e-way bill within three minutes is ‘too technical’.  Justice Md. Nizamuddin set aside the impugned order along with the rectification order and remanded the matter back to the Appellate Authority concerned to pass a fresh speaking order in accordance with the law after giving an opportunity of hearing to the petitioner

Cash-Credit Facility is not Debt, cannot be Made Attachable: Calcutta HC Orders to Lift Provisional Attachment J.L. Enterprises vs Assistant Commissioner 2023 TAXSCAN (HC) 1046

The Calcutta High Court ordered to lift provisional attachment and held that Cash-Credit Facility is not debt hence cannot be made attachable. A Division Bench of Chief Justice TS Sivagnanam and Justice Uday Kumar observed that “Therefore, we are of the view that the writ Court ought to have allowed the writ petition in its entirety instead of relegating the appellant to a remedy which is inapplicable to the cases where there is an order of provision attachment of a cash credit account.”

Delhi HC dismisses Plea challenging RBI’s decision to withdraw Rs. 2000 banknotes from Circulation.

On Monday, July 3rd, 2023, the Delhi High Court dismissed a Public Interest Litigation (PIL) that contested the Reserve Bank of India’s (RBI) decision to withdraw Rs. 2000 banknotes from circulation. The RBI had withdrawn the Rs. 2000 notes from the economy on May 19th, 2023.  Following the declaration, the Reserve Bank of India (RBI) Governor, Shaktikanta Das, made a public statement on May 22nd, 2023, regarding the implementation of the ‘Clean note policy’ for Rs. 2000 denomination banknotes. The governor clarified that the withdrawal of Rs. 2000 notes was carried out as part of the currency management operations of the RBI.

Reassessment Proceedings Initiated on Recovery of Tax Share Premium of Rs 679.32 Crores without any Tangible Material to Prove Income Escapement: Bombay HC Quashes Reassessment Order SLS Energy Pvt. Ltd vs Iniome Tax Offier 2023 TAXSCAN (HC) 1048

In a significant case, the Bombay High Court has quashed the reassessment proceedings initiated to recover the tax share premium of Rs. 679 crores without any reason on tangible material to prove Income Escapement.  There was neither tangible material from the assessing officer to form the basis for his reason to believe that the petitioner’s income had escaped assessment. In the absence of any basis for the AO’s reason to believe that income had escaped assessment nor any tangible material that would have otherwise given jurisdiction to reopen the assessment, even when the reopening was sought to be made within a period of four years, the Court quashed the reassessment process. 

Condition to Pay Cost to WBGST Authority for Delay of 148 days in Filing Appeal: Calcutta HC Allows Writ L.G. Balakrishnan & Bros Limited Vs The Assistant Commissioner of State Tax, Bowbazar Charge &Ors 2023 TAXSCAN (HC) 1049

The Calcutta High Court allowed the writ petition in the matter of condition to pay cost to West Bengal Goods and Service Tax Act (WBGST) Authority for delay of 148 days in filing appeal. The Court further noted that if petitioner pays the cost within the time stipulated herein, the appeal in question of the petitioner shall be heard and disposed of on merits within a period of 12 weeks from the date of filing of such proof of payment. In case of default in making the payment as indicated hereinabove, this order will not have any force and the order of the Appellate Authority dated would stand revived.

DTAA Benefits allowable to Assessee acts as Intermediary between Indian Subscribers and Alibaba.com Hongkong: Bombay HC The Commissioner of Income International vs Alibaba.Com Singapore E-Commerce 2023 TAXSCAN (HC) 1050

In a recent judgment, the panel composed of Justice K.R. Shriram and Justice Firdosh P. Pooniwalla provided relief to the assessee, Alibaba.com, Singapore E-Commerce Private Limited. The panel emphasized that the assessee, acting as an intermediary between Indian subscribers and Alibaba.com Hong Kong Company, is eligible for the benefit of Double Taxation Avoidance Agreement (DTAA). The High Court has observed that “AO has completely denied the existence of the assessee as an independent entity as if the assessee was only a front or a shadow entity of Alibaba Hong Kong. If the AO was so convinced that the entire activity in India to various subscribers was actually carried out by Alibaba Hong Kong and not by assessee, then we would have expected him to do something to Alibaba Hong Kong and not the assessee.”

Subsidy Received by Nestle India as Incentive to Establish Industrial Unit is Capital receipt, Cannot be Adjusted Against Block of Assets: Delhi HC PRINCIPAL COMMISSIONER OF INCOME TAX vs NESTLE INDIA LTD 2023 TAXSCAN (HC) 1051

In a significant ruling the Delhi High Court observed that the Subsidy received by Nestle India, the assessee as incentive to establish industrial unit is Capital receipt and cannot be adjusted against block of assets. Since the subsidy in this case was not intended as a payment to meet, directly or indirectly, a part of the cost of the assets, no adjustment could have been ordered, as was directed by CIT(A). The Tribunal, on this score, in our view, reached the correct conclusion” the Bench concluded.

Refund of IGST Allowable on Zero Rated Supply along with 7% Interest: Bombay HC Sunlight Cable Industries vs The Commissioner of Customs 2023 TAXSCAN (HC) 1054

In a recent judgement, the Bombay High Court has allowed the refund of Integrated Goods and Service Tax (IGST) on zero-rated supply along with 7% interest. The division bench of Justice G.S. Kulkarni and Justice Jitendra Jain has directed “the Respondents are directed to refund to the Petitioner the IGST paid by the Petitioner in respect of the goods exported, i.e. zero-rated supply, under shipping bills in question being an amount of Rs. 21,41,451/- with simple interest at 7% per annum with effect from 22nd February 2018.”

Importer not Entitled for Proportionate Increase in Import Quota when CTO on Enhanced Production Capacity issued after Fixing Total Import Limit: SC M/S. SANVIRA INDUSTRIES vs RAIN CII CARBON (VIZAG) LTD. & ORS. 2023 TAXSCAN (SC) 1889

In a significant case, the Supreme Court has held that the importer is not entitled to the proportionate Increase in import Outa when Consent to Operate (CTO) on enhanced production capacity was issued after fixing the total import limit and upheld the decision of the Delhi High Court which set aside the increased quota allocated for the import of raw pet-coke (RPC). It was held that there is no infirmity with the findings and conclusions of the Division Bench, in the impugned judgment and dismissed the appeal. 

Special Provision Will Prevail over General Provision in a Statute: Supreme Court Rules about Taxation Classification Santhosh Maize & Industries Limited vs State of Tamil Nadu &Anr 2023 TAXSCAN (SC) 188 

The Supreme Court in a case has ruled that on taxation classification if a special provision will prevail over the general provision in a statute. The bench of Justices S. Ravindra Bhat and Dipankar Datta held that the Circular dated 8th October 1998 does not run counter to the provisions of the Tamil Nadu General Sales Tax Act, 1959.

Calcutta HC directs Special Anomaly Committee to take Decision on Scale of Pay of Income Tax Officer The Union of India &Ors vs Ashis Chakraborty &Ors. 2023 TAXSCAN (HC) 1055

In a significant case, the Calcutta High Court directed the government to constitute the special Anomaly Committee to decide on the Scale of Pay of Income Tax Officers as per the recommendation of the Pay Commission.  Since it is a policy decision of the Government of India the Court comprising Justice Harish Tandon and Justice Prasenjit Biswas directed that the Union of India shall constitute a Special Anomaly Committee within two months and decide the representations made by the respondents within one month from the date of constitution of the said Committee.

Railway as Scraps Supplier Wrongly Deposited GST in different GSTN: MP HC directs Railway to Refund Rs. 13 Lakhs to Partnership Firm AGRAWAL AND BROTHERS vs AGRAWAL AND BROTHERS  2023 TAXSCAN (HC) 1056g

A Division Bench of Madhya Pradesh High Court observed that “no one cannot be made to suffer for the fault of another”. The bench directed the railway to refund Rs. 13,38,544/- to the petitioner-partnership firm which was paid to the Goods and Services Tax (GST) Authorities to avoid GST registration cancellation.  It was also mentioned that Respondent No.1 has the option to file a claim with the GST department regarding the amount paid by the petitioner. If such a claim is submitted, the competent authority of Respondent No.2 (GST Authorities) will assess and decide on the claim based on applicable laws.

Scrutiny of Returns not Essential for Initiating Proceedings to Demand Tax under APGST Act: Andhra Pradesh HC M/s Devi Traders vs The State of Andhra Pradesh 2023 TAXSCAN (HC) 1053

The Andhra Pradesh High Court observed that the Scrutiny of Returns not an essential condition for initiating proceedings to demand tax under Andhra Pradesh Goods and Services Act, 2017 (APGST Act).  The division bench of Justice U. Durga Prasad Rao and Justice Venkata Jyothirmai Pratapa said, “Sections 73 and 74 of APGST Act are not controlled by section 61 as reference to the same is absent. Section 74 uses “where it appears” conferring wide scope as information may be from any credible source. Proper officer may proceed under Section 74 of APGST Act based on action under Section 61 of APGST Act on scrutiny of returns or section 65 on audit or some other fact.” 

Secured Creditor has Priority Over Government Dues Under SARFAESI Act: Bombay HC Ronak Industries vs Assistant Commissioner Central Excise & Customs 2023 TAXSCAN (HC) 1052

The Bombay High Court recently ruled that the secured creditor has priority over the Government dues under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI).  A Division Bench of the Bombay High Court of Justice B. P. Colabawalla and Justice M.M. Sathaye observed that “Since the Full Bench decision of the Court in the case of Jalgaon Janta Sahakari Bank Ltd. and Anr. as rested the controversy of priority of the secured creditor viz-a-viz the dues of the Central Government or State Government or local authority under Section 26-E of the SARFAESI Act, 2002, thelien/charges/encumbrance/mutation entry, if any, registered with Mamlatdar by Assistant Commissioners cannot be allowed to stand and Sub Registrar would have to be directed to record/register the Sale Certificate/Sale Deed under the provisions of the Registration Act, 1908 as free from any encumbrances of the Assistant Commissioners.”

Payment Received by Colgate Palmolive Malaysia from Colgate India to Access SAP System is not ’Royalty’; Not Taxable: Bombay HC Commissioner of Income Tax (IT)-2 vs M/s. Colgate Palmolive Marketing SDN BHD 2023 TAXSCAN (HC) 1058

A Division Bench of Bombay High Court ruled that the payment received by the Colgate Palmolive Marketing SDN BHD, from the Colgate Palmolive (India) Limited to access the SAP system does not amount to process royalty under Section 9(1)(vi) of the Income Tax Act, 1961. Thus, not taxable.  The court noted that the payment made by CPI to the Assessee cannot be categorized as royalty according to Explanation 5. Based on the evidence presented, it was established that CPI had been provided restricted access to the SAP system at its own expense to utilize the data available within the system. This finding aligns with the decision made by the ITAT. Hence, payment made by CPI cannot be regarded as payment for use of the system and therefore cannot amount to royalty under the said Explanation 5, thus not taxable.

Vehicle Tax Exemption Allowable on Car Purchased by Visually Challenged Person: Madras HC CaruniaSeelavathi vs The Secretary to the Government of Tamil Nadu 2023 TAXSCAN (HC) 1057

The Madras High Court recently held that Vehicle Tax Exemption is allowable on cars purchased by visually challenged persons. The authority concerned shall ensure that necessary orders exempting the petitioner from the motor vehicle’s tax as well as the GST are passed within a period of four weeks from the date of receipt of a undertaking letter by the petitioner.”, the Court held.

Delhi HC quashes Registered FIR u/s 482 of CrPC on ground of Civil Nature of Disputed Matter SHIV KUMAR & ANR. vs STATE OF NCT OF DELHI & ANR. 2023 TAXSCAN (HC) 1063

In a recent case, the Delhi High Court quashes the registered First Information Report (FIR) under section 482 of the Criminal Procedural Code,1973 on the ground of the civil nature of the disputed matter.  A single-member panel comprising Dinesh Kumar Sharma held that the registered FIR under sections 406/420 read with 120B of the Indian Penal Code registered at Delhi police station was quashed under section 482 of the Criminal Procedural Code. 

Karnataka HC Dismisses WP against Issuance of Blocking Orders u/s 69A of IT Act on ground of Non-Violative of Doctrine of Proportionality X CORP vs UNION OF INDIA 2023 TAXSCAN (HC) 1062

The Bengaluru bench of Karnataka High Court dismissed the writ petition against the issuance of blocking orders under section 69A of the Information Technology Act,2000 on the ground of the non-violative doctrine of proportionality.  The Court observed that the impugned orders blocking the tweets/accounts for an indefinite period are unassailable on the doctrine of proportionality.  A single-member bench comprising Krishna S Dixit held that the petition was devoid of merits and is liable to be dismissed with exemplary costs.  

Penalty can be Imposed when any Person Committed Act of Omission in relation to Goods Rendered for Confiscation u/s 112(a) of Customs Act: Delhi HC RAJEEV KHATRI vs COMMISSIONER OF CUSTOMS (EXPORT) 2023 TAXSCAN (HC) 1061

In a recent case, the Delhi High Court held that the penalty can be only imposed when any person committed an act of omission to goods or services rendered for confiscation under section 112(a) of the Customs Act, 1962.  The two-member bench comprising Vibhu Bakhru and Amit Mahajan held that the penalty imposed on the assessee under section 112(a) of the Customs Act was not sustainable and quashed while allowing the appeal filed by the assessee.

Provisional Attachment u/s 83 of CGST Act cannot be Done after Expiry of One Year from Date of Original Attachment: Bombay HC Bharat Parihar vs State of Maharashtra Thr. PP Office AndOrs. 2023 TAXSCAN (HC) 1059

In a recent case, the Bombay High Court held that the provisional attachment of a Bank Account under section 83 of the Central Goods and Service Tax Act, 2017 cannot be done after the expiry of one year from the date of the original attachment.   The two-member panel comprising G.S. Kulkarni and Jitendra Jain held that provisionally attaching the Petitioner’s bank account was rendered illegal and invalid under the provisions of the prescribed law and quashed the order while allowing the appeal filed by the assessee.

GST Dept and Anti-Fraud Dept of Police cannot send Notices to Advocates of Alleged Tax Evaders: Calcutta HC Issues Directions HIMANGSHU KUMAR RAY vs STATE OF WEST BENGAL 2023 TAXSCAN (HC) 1081

In a recent ruling, the bench of Chief Justice T.S. Sivagnanam and Justice Hiranmay Bhattacharyya of Calcutta High Court ruled that the Goods and Services Department (GST) or Anti-Fraud Dept of police cannot issue any notices to the advocates of the tax evaders or any individuals. The High Court stated that “it is the GST authorities who have first to conduct the thorough study and investigation to ascertain as to whether there has been any illegal availment of GST. Upon such assessment, it will be well open to the GST authorities to initiate proceedings under the provisions of the GST Act. However, if the authority comes to the conclusion that there is a criminal overt act attached to the said violation, then the matter should be handed over to the appropriate investigation authority who has to proceed in accordance with the law.”

Madras HC Dismisses WP against Assessment Order passed u/s 73 of Tamil Nadu Goods and Services Tax Act on ground of Limitation Shree Agencies vs Assistant Commissioner (ST) 2023 TAXSCAN (HC) 1079

The Madras High Court dismissed the writ petition filed against the assessment order passed by the Assistant Commissioner under section 73 of the Tamil Nadu Goods and Services Tax Act,2017 on the ground of Limitation.  A single-member bench comprising Anitha Sumanth (Judicial) directed the petitioner to file any appeal before the first appellate authority within one week from the date of receipt of a copy of this order. Also held that the same shall be taken on file by the first appellate authority without reference to limitation and ensure compliance with all other statutory conditions, including pre-deposit and disposed expeditiously as per the law. 

Rejection of Claim of Refund Application u/s 27A of the Customs Act without Giving Sufficient opportunity to petitioner: Madras HC Quashes Order M/s SIBCO Overseas Pvt Ltd vs The Commissioner of Customs 2023 TAXSCAN (HC) 1078

The Madras High Court quashed the order passed by the Commissioner of Customs for rejecting the claim of refund application filed under section 27A of the Customs Act, 1962 without giving sufficient opportunity to the petitioner. A single-member bench comprising Anitha Sumanth (Judicial) quashed the order passed by the Commissioner of Customs and directed them to reconsider the matter. 

Madras HC Upholds Order passed by Deputy Commissioner u/s 220(6) of Income Tax Act on ground of Non-appearance of Petitioner Doosan power systems India Private Limited vs Deputy Commissioner of Income Tax 2023 TAXSCAN (HC) 1077

The Madras High Court upheld the order passed by the Deputy Commissioner under section 220(6) of the Income Tax Act,1961 on the ground of non-appearance of the petitioner.  A single-member bench comprising Anita Sumanth (Judicial) directed that the stay applications, after hearing the petitioner, shall be disposed of within six weeks from the date of the current order. 

Relief to Manipal Finance Corporation Ltd: Karnataka HC dismisses Appeal of Revenue on Grounds of Monetary Limits COMMISSIONER OF INCOME TAX vs M/S. MANIPAL FINANCE CORPORATION LIMITED 2023 TAXSCAN (HC) 1080

The Karnataka High Court granted relief to Manipal Finance Corporation Limited by dismissing the appeal of the revenue. The high court has dismissed the same on the grounds of monetary limits. Further, even in the case of composite order of any High Court or appellate authority which involves more than one assessment year and common issues in more than one assessment year, no appeal shall be filed in respect of an assessment year or years in which the tax effect is less than the monetary limit. In cases where a composite order/ judgement involves more than one assessee. each assessee shall be dealt with separately. Thus viewing the instructions given and monetary limits set by the abovementioned circular, it was decided to dismiss the appeal of the revenue.

Income Tax Proceedings against Saravana Group for Suppressed Sales: Madras HC Dismisses Petition Challenging Tax Demand on Technical Grounds Saravana Selvarathnam Retail Private Limited vs The Assistant Commissioner of Income Tax 2023 TAXSCAN (HC) 1076

The Madras High Court dismissed the writ petition filed by the Saravana Group against income tax proceedings for suppressed sales and challenging tax demand on technical grounds.  A single-member bench comprising Anita Sumanth (Judicial) held that no avenue to intervene in these writ petitions and in any event, and no case is made out for quashing the impugned demands, in light of the admitted position while dismissing the petition filed by the petitioners. 

Relief to HDFC Bank : Madras HC Quashes Assessment Order passed without giving Opportunity of Personal hearing  u/s 73 of Tamil Nadu Goods and Services Tax Act HDFC Bank Limited vs The Deputy Commissioner 2023 TAXSCAN (HC) 1075

The Madras High Court quashes the assessment order passed without giving sufficient opportunity for a personal hearing to the petitioner under section 73 of the Tamil Nadu Goods and Services Tax Act, 2017.  A single-member bench comprising Anita Sumanth directed the adjudicating authority to reconsider the matter after giving the sufficient opportunity of a personal hearing to the petitioner and passed an order within four weeks from the date of the personal hearing and quashed the previous assessment order.

GST Arrears Recovery: No Coercive Action during Pendency of Writ Petition, says Orissa HC M/s. Chirag Industries vs Additional Commissioner of State Tax 2023 TAXSCAN (HC) 1074

The Cuttack bench of the Orissa High Court held that no coercive action shall be taken against the petitioner during the pendency of the writ petition for the Goods and Service Tax arrears.  The two-member bench comprising B.R Sarangi and M.S Raman held that no coercive action shall be taken against the Petitioner during the pendency of the writ petition so far as the impugned demand is concerned. 

Deletion of Addition by CIT(A) against Invalid Assessment Order: Delhi HC disposes appeal of Revenue PR. COMMISSIONER OF INCOME TAX vs NAGAR DAIRY PVT. LTD 2023 TAXSCAN (HC) 1073

The Delhi High Court dismissed the appeal filed by the revenue against the deletion of addition by the Commissioner of Income Tax (Appeals).  The two-member panel comprising Rajiv Shakdher and Girish Kathpalia dismissed the application filed by the revenue and held that the decision of the Commissioner was as per the law and liable to be sustained.

Relief of Vodafone: Delhi HC Quashes Assessment Order passed by AO on ground of Non-Consideration of Proper Evidence VODAFONE ROAMING SERVICES SARL vs ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 2023 TAXSCAN (HC) 1072

In a recent case, the Delhi High Court quashed the assessment order passed by the assessing officer under section 144 of the Income Tax Act,1961 on the ground of non-consideration of proper evidence.  The two-member panel comprising Rajiv Shakdher and Girish Kathpalia quashed the assessment order and directed the assessing officer to pass fresh assessment order while disposing of the petition filed by the petitioner.

No Appeal would Lie against Order in Miscellaneous Application u/s 260A of Income Tax Act: Delhi HC Disposes Appeal against L.G Electronics COMMISSIONER OF INCOME TAX (INTERNATIONAL TAXATION)-2 vs L.G. ELECTRONICS INC. KOREA 2023 TAXSCAN (HC) 1071

The Delhi High Court held that no appeal would lie against the order in miscellaneous applications under section 260A of the Income Tax Act,1961.  The two-member bench comprising Rajiv Shakdher and Girish Kathpalia held that appeal was disposed of and granted the liberty to file a writ petition against the order.

Assessment Order passed under Tamil Nadu GST Act based on General Notice Issued is not Valid: Madras HC sets aside Order M/s.HatsunAgro Product Ltd vs Deputy Commissioner 2023 TAXSCAN (HC) 1070

The Madras High Court has held that the assessment order passed under the Tamil Nadu Goods and Service Tax Act,2017 based on the general notice issued is not valid. “In the interests of substantial justice, the impugned order of assessment dated 17.03.2023 is set aside and shall be treated as a show cause notice by the petitioner, who shall appear along with all details in support of the reversal under the impugned order on Thursday, the 13th July 2023, at the specific request of the counsel for the petitioner, without expecting any further notice in this regard.”, the Court comprising Dr Justice Anita Sumanth held.

Cancellation Order of GST Registration without Stating Reason is invalid: Gujarat HC OM TRADING vs STATE OF GUJARAT 2023 TAXSCAN (HC) 1069

In a recent case, the High Court of Gujarat held that the cancellation order of Goods and Service Tax registration without stating the reason is invalid. While allowing the appeal, the two-judge panel of Justice Vipul M Pancholi and Justice Devan M Desai set aside and quashed the Show Cause notice and Order.

Compensation Received For Compulsory Acquisition of Land Is not Taxable as Capital Gains: Gujarat HC ANILABEN ROHITBHAI MODI vs INCOME TAX OFFICER 2023 TAXSCAN (HC) 1068

The High Court of Gujarat has held that compensation received for the compulsory acquisition of land is not taxable as capital gains. A division bench comprising Justice Ashutosh Shastri and Justice J C Doshi observed that “merely because the compensation amount is agreed upon would not change the character of acquisition from that of compulsory acquisition to the voluntary sale. It may be mentioned that this is now the procedure which is laid down even under the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 as per which the Collector can pass rehabilitation and resettlement awards with the consent of the parties/land owners. Nonetheless, the character of the acquisition remains compulsory.” It was evident that the land appears to be compulsorily acquired and the income is rightly claimed as exempted and therefore, the conclusion of an authority that income has escaped assessment, appears to be erroneous.  The Court quashed and set aside the impugned order dated 27.01.2022 and also the impugned notice.

Enquiry u/s 148A(d) is only to Extent of (Un) Availability of Information Showing Income Escapement: Allahabad HC Deepak Kumar Yadav vs Principal Commissioner of Income Tax And Another 2023 TAXSCAN (HC) 1066

In a significant case, the Allahabad High Court has held that enquiry under section 148A(d) of the Income Tax Act, 1961 applies only to the extent of (un) availability of information showing income escapement. A division bench comprising Justice Ashwani Kumar Mishra and Justice Shiv Shanker Prasad viewed that “any observations of the assessing authority while passing an order under section 148A(d) about merits of assessment of income would remain subject to the order to be ultimately passed in reassessment proceedings under section 148 and would not be to the prejudice of rights and contentions of the assessee under section 148 as well as departmental remedies in respect thereof.” The petition was dismissed.

Payment to CA firms for Special Audit under MSMED Act Not Consideration: Delhi HC Quashes Income Tax Proceedings PR. COMMISSIONER OF INCOME TAX vs MICRO AND SMALL ENTERPRISE FACILITATION COUNCIL AND ANR. 2023 TAXSCAN (HC) 1067

The Delhi High Court has held that the remuneration payable to the accountant doing a special audit under the Micro, Small and Medium Enterprises Development Act (MSMED), 2006 does not amount to consideration. Justice Prathiba M Singh held that the IT Department cannot be termed as a ‘buyer’ when it is nominating the accountant for conducting a Special Audit and neither can the CA Firm be termed as a ‘supplier’. The remuneration payable to the accountant cannot also be termed as ‘consideration’ as the Special Audit is a statutory duty being performed by the accountant for and on behalf of the AO. Insofar as Audits under Section 142(2A) are concerned, the IT Act would have to be reckoned as the Special Act and the MSMED Act as the general Act dealing with MSME disputes. 

Business Profit Earned by an Entity not having PE in India is not Taxable as per DTAA Provisions: Bombay HC Commissioner of Income Tax vs M/s. Colgate Palmolive Marketing SDN BHD 2023 TAXSCAN (HC) 1064

In a recent ruling, a Division Bench of Bombay High Court ruled business profit earned by an entity not having Permanent Establishment in India is not taxable as per provisions of Double Taxation Avoidance Agreement (DTAA) The court rejected the appeal since no significant issue arose and there was no requirement to intervene in the ITAT’s decision.

GST Refund by Forming 25 Bogus Firms: Madhya Pradesh HC refuses to Grant Anticipatory Bail MOHIT JAIN vs UNION OF INDIA 2023 TAXSCAN (HC) 1064

The High Court of Madhya Pradesh refused to grant anticipatory bail to the accused who had refunded the Goods and Service Tax (GST) by forming 25 Bogus Firms. GST-RI and GST-3B sales and purchase of as many as 25 bogus firms are liable to be investigated, hence, looking to the gravity of the offence and huge amount of refund of GST through bogus firms, no case is made out for grant of anticipatory bail.

Payment of Property Tax cannot be Assessed on basis of Non-use or Close condition of Property u/s 140 of GPMC Act: Gujarat HC AHMEDABAD SUNNI MUSLIM WAQF COMMITTEE vs AHMEDABAD MUNICIPAL CORPORATION 2023 TAXSCAN (HC) 1060

In a recent case, the Ahmedabad bench of the Gujarat High Court held that the payment of property tax cannot be assessed based on the non-use or close condition of the property under section 140 of the Gujarat Provincial Municipal Corporation Act, 1949. The two-member bench comprising Ashutosh Shastri and Divyesh A. Joshi held that this was not a fit case in which to exercise the appellate jurisdiction and it contained no irregularity, illegality, or perversity in any form while dismissing the appeal filed by the assessee.

Goods Meant for Exports were taken Back to Factory for Repair not a Case of Tax Evasion: Calcutta HC USHA MARTIN LIMITED vs THE DEPUTY COMMISSIONER OF STATE TAX 2023 TAXSCAN (HC) 1089

The Calcutta High Court held that goods meant for exports were taken back to the factory for repair not a case of tax evasion. The Court Comprising Chief Justice T. S. Sivagnanam and Justice Uday Kumar considered the conduct of the assessee and having found that the conduct was not with the intention to evade tax, granted relief to those assessees. The case on hand also would fall under the said category since there is no allegation of any evasion of tax rather it is not disputed that the goods were being transported under a cover of challan to the factory of the appellants for carrying out repairs. The appeal as well as the writ petition was allowed and set aside the impugned order. 

Madras HC dismisses WP Filed for Render Legal Opportunity of Cross-Examination in Personal Hearing on ground of Non-Appearance of Transporters M/s.Ambika Timber Depot vs The Assistant Commissioner of GST 2023 TAXSCAN (HC) 1090

The Madras High Court dismissed the writ petition filed by the petitioner for rendering the legal opportunity of cross-examination in a personal hearing on the ground of the non-appearance of transporters.  A single-member panel comprising Justice Anitha Sumanth held that the petitioner do not pursue the writ petitions filed and it was unnecessary to issue a writ of mandamus and dismissed the writ petition filed by the petitioner. 

Notices And Proceedings Under Income Tax Act for Deceased Assessee as Null and Void: Bombay HC Dhirendra Bhupendra Sanghvi vs Assistant Commissioner of Income Tax Cirlce 2023 TAXSCAN (HC) 1088

A Division Bench of Bombay High Court has held that the notices and proceedings under Income Tax Act, 1961 for deceased assessee as null and void.  The Division Bench of Justice Kamal Khata and Justice Dhiraj Singh Thakur quashed the impugned order holding that the notice and all consequential proceedings in the name of a deceased assessee are null and void.

Madras HC Directs to Decide Maintainability of Statutory Appeal which Unable to Access Online Filing Portal Due to Technical Glitches M/s Sundaram Clayton Limited vs The Deputy Commissioner (ST) 2023 TAXSCAN (HC) 1091

In a recent judgment, the Madras High Court directed the adjudicating authority to decide the maintainability of a statutory appeal filed by the petitioner who was unable to access the online portal of filing on account of some technical glitches.   A single-member panel Justice Anitha Sumanth held to direct the officials to the decision taken about the maintainability of the statutory appeal filed by the petitioner.  

Gujarat HC grants permission to pay Tax liability in Instalments NIRAJKUMAR NARESHKUMAR LAKHYANI vs STATE OF GUJARAT 2023 TAXSCAN (HC) 1092 

The Gujarat High Court has overturned the decision of the Adjudicating Authority and granted permission to an assessee to fulfil their tax liability The division bench comprising Justice NV Anjaria and Devan M Desai observed that since the petitioner has shown readiness and willingness to pay up the demand for Input Tax Credit raised by the authorities although without prejudice to the rights, the Court allowed the petitioner to pay within the span of 15 equal monthly instalments the tax demanded.

Dyeing Chemicals Embedded in Final Cloth is Leviable to Tax; not Waste Generated During Job Process: Supreme Court HE STATE OF HARYANA & ANR vs M/S A. P. PROCESSORS 2023 TAXSCAN (SC) 193

The Supreme Court bench comprising Justice B.V. Nagarathna and Justice Prashant Kumar Mishra upheld the ruling of the Punjab and Haryana High Court. They stated that the tax shall be applicable to the dyeing chemicals present in the finished fabric, but not on the waste produced during the dyeing process. The Supreme Court affirming the decision of the High Court stated that “the matters have been remanded to the Assessing Officer to consider the case of the assessees as well as of the Appellants herein and to pass fresh orders in terms of the directions issued by the High Court. We do not find any reason to interfere with the impugned orders.”

GST Dept cannot Deny ITC on Ground of Deficiency in Memo Once Taxpayer Succeeded in Appeal: Delhi HC ADVANCE SYSTEMS vs THE COMMISSIONER OF CENTRAL EXCISE AND CGST CITATION: 2023 TAXSCAN (HC) 1093

The Delhi High Court held that the Goods and Service Tax (GST) Department cannot deny the Input Tax Credit (ITC) on the ground of the deficiency in the memo filed by the taxpayer and once the taxpayer succeeded in appeal. The two-member bench comprising Vibhu Bakhru And J Amit Mahajan, J allowed the refund of the claim of Input Tax Credit filed by the petitioner.

Karnataka High Court Directs Defreezing of Bank Account in Service Tax Dispute upon Furnishing of Security by Assessee M/S GUARD INDIA SECURE SERVICES PVT LTD vs UNION OF INDIA 2023 TAXSCAN (HC) 1095 

The Karnataka High Court has directed the defreezing of the bank account of the assessee in a service tax dispute upon the furnishing of security by the assessee. The bench also clarified that its decision to defreeze the account was limited to the specific issue of the bank account attachment and would not be binding in other proceedings. All other contentions raised by both parties shall be kept open for future consideration, the court held.

Subscription Amount Received from Subscribers of E-Journals Cannot be Treated as Royalty: Delhi HC THE COMMISSIONER OF INCOME TAX vs SPRINGER NATURE CUSTOMER SERVICES CENTRE GMBH 2023 TAXSCAN (HC) 1103

In a significant case, the Delhi High Court has held that the subscription amount received from subscribers of e-journals cannot be treated as royalty. The division bench of Justice Rajiv Shakdher and Justice Girish Kathpalia has observed that “the subscription amount cannot be treated as royalty, having regard to the fact that there is nothing on record to suggest that the respondent/assessee has granted the right in respect of copyright to the concerned subscribers of the e-journals. All that the respondent/assessee did was to sell the copyrighted publication to the concerned entities, without conferring any copyright in the said material.” 

Writ Jurisdiction cannot be Invoked to Consider Second Rectification Application as Order u/s 154 of IT Act is Appealable: Calcutta HC S.P. Paper Packaging Pvt. Ltd vs Union of India &Anr. 2023 TAXSCAN (HC) 1097

The Calcutta High Court has held that the Writ jurisdiction cannot be invoked to consider rectification application since an order passed under section 154 of the Income Tax Act, 1961 is appealable. While dismissing the petition, in view of the existence of the appeal provision under section 246 sub-section (c), the Court granted liberty to prefer an appeal against the order dated 25th November 2020 before the appellate authority.

Dispute in Fact about Payment of Income Tax Dues Cannot be Decide by Writ Court: Orissa HC directs to approach AO  MMTC Ltd. vs Deputy Commissioner of Sales Tax and others 2023 TAXSCAN (HC) 1101

The Orissa High Court directed to approach the Assessing Officer(A0) since the dispute in fact about payment of income tax dues cannot be decided by the writ court.  A division bench comprising Dr Justice B R Sarangi and Justice Murahari Sri Raman has held that since there are disputed questions of fact, the Court cannot resolve the dispute involved in the writ petition. Therefore, the Court permitted the petitioner to approach the Assessing Officer ventilating its grievance, which shall be considered by law.

Threatening Emails to State Tax Commissioner to Comply Court Order: Calcutta HC orders to Ignore Adverse Remarks from Service Record Sanpak Business Solutions And Trade LLP &Ors vs Assistant Commissioner 2023 TAXSCAN (HC) 1097

The Calcutta High Court ordered to ignore adverse remarks from service records since the act of petitioner in sending threatening emails to State Tax Commissioner to comply with the Court order. It was clarified by the court that the officer concerned will apply his judicious mind in passing the final order based on the aforesaid impugned show-cause-notice, strictly on merit.

Non-Constitution of GST Appeal: Orissa HC directs to Pay Entire Tax Demand before Availing Second Appeal M/s. Biswal Sales vs Commissioner of CT & GST 2023 TAXSCAN (HC) 1104

The Cuttack bench of the Orissa High Court directed the petitioner to pay the entire tax demand before availing a second appeal.  The two-member bench comprising B.R Sarangi and M.S Raman held that the petitioner had to pay the entire demand of tax before availing the second appellate tribunal.

AO Fails to Clarify Concealment of Particulars of Income or Furnished Inaccurate Particulars: Delhi HC quashes 300% Penalty PR. COMMISSIONER OF INCOME TAX vs GOPAL KUMAR GOYAL 2023 TAXSCAN (HC) 1110

The Delhi High Court quashed the 300% penalty imposed under Section 271(1)(c) of the Income Tax Act, 1961 on grounds that the Assessing Officer (AO) failed to clarify the concealment of particulars of Income or furnished inaccurate particulars. The bench of Justice Rajiv Shakhder and Justice Girish Kathpalia, relying on the ECS Ltd.’s case, observed that the Assessing Officer has not recorded his satisfaction in explicit terms, the assessment orders should indicate that the Assessing Officer had arrived at such a satisfaction. Thus, the bench opined that no substantial question of law arises for our consideration and closed the appeal. 

Calcutta HC Upholds Assessment Order on ground of Passing of Order with approval of ‘Specified Authority’ u/s 151(ii) of Income Tax Act GIRIRAJ COMMERCIAL PRIVATE LIMITED vs UNION OF INDIA AND ORS 2023 TAXSCAN (HC) 1107  

The Calcutta High Court upheld the assessment order passed under section 148A(d) of the Income Tax Act, 1961 on the ground of passing of order with the approval of specified authority which was defined under section 151(ii) of the Income Tax Act. A single-member bench comprising Nizamuddin. J held that the approval for passing the order under Section 148A(d) of the Income Tax Act was legal and valid and the aforesaid impugned order does not call for any interference by the writ petition and dismissed the writ petition filed by the petitioner. 

Supreme Court holds Two Extension of Tenure to ED Director Sanjay Kumar Mishra as Illegal: Can Continue in Post only Till July 31st DR. JAYA THAKUR vs UNION OF INDIA & ORS 2023 TAXSCAN (SC) 196 

The Supreme Court of India held that two extensions of tenure to Enforcement Directorate director Sanjay Kumar Mishra as illegal and directed him to continue in the post only till July 31 st  The impugned orders dated 17th November 2021 and 17th November 2022 granting extensions to the tenure of respondent No.2- Sanjay Kumar Mishra for a period of one year each are held to be illegal.  The writ petitions are partly allowed to that extent. However, respondent No.2- Sanjay Kumar Mishra is permitted to continue to hold office till 31st July 2023.”, the Coram held. 

Dues Payable to Secured Creditors are at Higher Footing Than Electricity Dues: Supreme Court PASCHIMANCHAL VIDYUT VITRAN NIGAM LTD vs RAMAN ISPAT PRIVATE LIMITED & ORS 2023 TAXSCAN (SC) 196

The Supreme Court has held that dues payable to secured creditors are at a higher footing than electricity dues and ruled that Section 238 of the Insolvency and Bankruptcy Code overrides the provisions of the Electricity Act, 2003. While dismissing the appeal, the bench comprising Justices S. Ravindra Bhat and Dipankar Datta directed the liquidator to decide the claim exercised by PVVNL in the manner required by law. 

Relief to Zee Entertainment Enterprises: Calcutta HC Quashes Investigation proceedings filed u/s 385 of IPC on ground of No Dishonest Intention for Collecting Subscription Fee from DPO  Zee Entertainment Enterprises Ltd. &Ors vs State of West Bengal &Anr 2023 TAXSCAN (HC) 1127

The Calcutta High Court quashed the investigation proceedings under section 385 of the Indian Penal Code,1860 on the ground of no dishonest intention for collecting the subscription fee from the Distribution Platform Owners (DPO).   A single-member bench comprising Shampa Dutt held that petitioners acted as per the agreement between the parties to demand their legitimate dues and there was also no dishonest intention on the part of the petitioner and quashed the investigation proceedings filed under section 385 of the Indian Penal Code. 

Order passed U/s 148 A(d) of Income Tax Act without providing a copy of Evidence and Denying Opportunity to Cross Examination is invalid: Calcutta HCHOWRAH GASES LIMITED vs ASSISTANT COMMISSIONER OF INCOME TAX 2023 TAXSCAN (HC) 1120 

In a recent case, the Calcutta High Court held that an order passed under section 148 A(d) of the Income Tax Act, 1961 without providing a copy of the evidence and denying the opportunity for cross-examination is invalid. Considering the facts and circumstances of the case, Justice Md. Nizamuddin set aside the impugned order under Section 148A(d) of the Act and subsequent notice under Section 148 of the Act and remanded the matter back to the assessing officer concerned to pass a fresh order.

The assessment order passed is not Legal as Approval u/s 153D was Given Mechanically: Delhi HC PR. COMMISSIONER OF INCOME TAX vs ANUJ BANSAL2023 TAXSCAN (HC) 1134

The Delhi High Court in a recent ruling held that the assessment order passed is not legal as approval under section 153D of the Income Tax Act, 1961 was given mechanically. A division bench comprising Justice Rajiv Shakdher and Justice Girish Kathpalia upheld the order of the Tribunal and held that there was the absence of application of mind by the ACIT in approving under Section 153D of the Income Tax Act, 1961.

Chhattisgarh HC directs 2 Impersonated Sales Tax Officers to pay Rs. 2L Compensation Duping Rs. 2.5L Alex Adward Kujur vs State Of Chhattisgarh 2023 TAXSCAN (HC) 1144

A single bench of Justice Deepak Kumar Tiwari of Chhattisgarh High Court has instructed two individuals who posed as sales tax officers to provide Rs. 2 lakhs in compensation to the victims who were deceived into giving them 2.5 lakhs under the pretense of securing the allocation of a petrol pump and purchasing land. It was clarified that the applicant will not be subjected to any additional jail sentence since he has already served the substantive jail term, and the default sentence for the fine has also been completed. The rest of the contested judgment will remain unchanged.

Assessee Fails to Reply to SCN alleging it as Invalid: Allahabad HC grants One month To Submit Reply M/S Abhay Traders vs Commissioner Commercial Tax 2023 TAXSCAN (HC) 1145

In a recent ruling, the Allahabad High Court granted one month to submit the reply since the assessee failed to submit that alleging the Show Cause Notice (SCN) as invalid. A division Bench comprising Justice Siddhartha Varma and Justice Arun Kumar Singh Deshwal allowed the petitioner to file his reply/objection against the impugned notice and relevant material within one month. 

Vehicle cannot be Seized by Customs Department on Mere Apprehension of Usage for Transporting Smuggled Goods: Kerala HC SAFIR P vs THE COMMISSIONER OF CUSTOMS 2023 TAXSCAN (HC) 1146

In a recent decision the Kerala High Court observed that the vehicle cannot be seized by the Customs Department on mere apprehension of usage for transporting smuggled goods.  A Single Bench of Justice Bechu Kurian Thomas observed that “The power of confiscation under section 115(2) of the Customs Act can arise only if the vehicle was actually used or is being used for smuggling goods and not for apprehended use or future use. Hence a vehicle cannot be seized by customs on an apprehension that it may be used in future as a means of transporting smuggled goods.’

Loan to Credit Card Holders are Not Part of Credit Card Service, No GST Exemption: Calcutta HC Ramesh Kumar Patodia vs City Bank N.A. and Ors. 2023 TAXSCAN (HC) 1147 

The Calcutta High Court has held that loans to credit card holders are not part of credit card service and held that No Goods and Service Tax Exemption. Justice Biswaroop Chowdhury added further that the basic difference between a loan and a credit card is that the former is granted as a necessity and is a welfare scheme and the latter is a facility granted to customers to get goods and services on credit from 3rd parties by availing the Credit Card Services of the Bank regarding payment.

Registration of Vehicle with RTO not Allowable when Assessee Fails to File Form F Under Odisha Motor Vehicles Taxation Rules: Orissa HC Khimji Super Bikes LLP, Bhubaneswa vs State of Odisha and others 2023 TAXSCAN (HC) 1152

The Orissa High Court has held that registration of the vehicle with the Regional Transport Officer(RTO) is not allowable when the assessee failed to file Form F under Odisha Motor Vehicles Taxation Rules, 1976. Justice K R Mohapatra held that “the Petitioner-Dealer cannot register the vehicle with any Regional Transport Officer of his choice.” Since the Petitioner has not yet complied with the direction made in W.P.(C) No.1267 of 2023, the writ petition was dismissed.

No Omission or Non-disclosure on Part of Assessee: Bombay HC Quashes Re-Assessment Mukand Limited vs Union of India 2023 TAXSCAN (HC) 1150 

The Bombay High Court quashed re-assessment on no omission or non-disclosure on the part of the assessee, Mukand Limited. A Division Bench consisting of Justices KR Shriram and Firdosh P Pooniwalla observed that “In this case, petitioner had filed all details and the subject of brought forward unabsorbed depreciation was also considered while passing the assessment order under Section 143(3) of the Income Tax Act. Therefore, the Assessing Officer had in his possession all primary facts and it was for him to draw proper inference as to whether the brought forward unabsorbed depreciation should be adjusted against capital gains or profit and gains from business or profession.”

Income Tax Deduction u/s 80IA(4)(iii) Allowable on Obtaining Govt Approval to Industrial Park: Bombay HC The Pr. Commissioner of Income Tax vs Punit Chettiar alias Punit Balan 2023 TAXSCAN (HC) 1148

The Bombay High Court ruled that income tax deduction under Section 80IA(4)(iii) allowable on obtaining Government approval to Industrial Park.  A Division Bench comprising of Justices KR Shriram and Firdosh P Pooniwalla observed that “The objection of the AO that the Industrial Park was being developed by the partnership firm is also not factually correct, in view of the explanation offered by the Assessee and also the letter issued by the Competent Authority. Once the Central Government grants the approval, it is incumbent on the part of the AO to grant the claim of deduction.”

Mahazar not Served on Seizure of Car and Cash: Madras HC orders Provisional Release of Seized Car Shri Eburamusa Sherif vs The Principal Commissioner of Customs 2023 TAXSCAN (HC) 1149

The Madras High Court ordered provisional release of seized car as no mahazar was served on seizure of car and cash. “On compliance of the above conditions by the petitioner, the said car shall be provisionally released by the second respondent within three days. The cash seized shall be released/or confiscated and /or appropriated towards penalty if only any after adjudication of the proposed proceedings” the Court noted.

Four Years Is Reasonable Time of Limitation in Absence limitation provided in Statute for an order u/s  201 of Income Tax Act: Patna HC Dismisses Appeal Against Indian Oil Corporation  Income Tax Officer vs Indian Oil Corporation Ltd 2023 TAXSCAN (HC) 1153

The Patna High Court while dismissing the appeal against Indian Oil Corporation Ltd,  has held that four years is a reasonable time of limitation in the absence of limitation provided in statute for an order under section 201 of the Income Tax Act, 1961. Chief Justice K Vinod Chandran and Justice Partha Sarthy answered the question of law against the revenue and in favour of the assessee and reject the appeals filed by the Revenue.

Delhi HC Refuse To Grant Bail To Director Of Shakti Bhog In Money Laundering Case TARUN KUMAR vs ASSISTANT DIRECTORATE OF ENFORCEMENT 2023 TAXSCAN (HC) 1158 

In a recent judgement, the Delhi High Court refused to grant bail to the director of Shakti Bhog in a Money laundering case. Justice Jasmeet Singh held that “In the light of these documents and material facts I cannot hold that the applicant is not guilty of the offence of money laundering.”

Revenue Fails to Prove Unjust Enrichment on Sanctioned Erroneous Refund of Excise Duty: Jammu Kashmir &Ladak HC  sets aside Extended Period of Limitation Commissioner of Central GST and Central Excise vs Krishi Rasayan Exports Pvt. Ltd 2023 TAXSCAN (HC) 1157

In a significant case, the High Court of Jammu & Kashmir and Ladakh set aside the extended period of limitation since the revenue fails to prove unjust enrichment on sanctioned erroneous refund of excise duty.  A division bench comprising Justice Sanjeev Kumar and Justice Javed Iqbal Wani while dismissing the petition observed that the revenue has also failed to make out a case of unjust enrichment having failed to show how the respondent has benefited by such purported erroneous refund sanctioned in its favour by the Competent Authority.

Orissa HC Stays Demand of GST Due to Non Constitution of Second Appellate Authority Trilochan Biswal vs Commissioner of CT & GST 2023 TAXSCAN (HC) 1154 

The Orissa High Court stayed the demand for Goods and Service Tax (GST), due to the non-constitution of the second appellate authority. A Division bench comprising Dr Justice B R Sarangi and Justice Murahari Sri Raman held that “Since the petitioner wants to avail the remedy under the provisions of law by approaching the 2nd appellate tribunal,  which has not yet been constituted, as an interim measure subject to the Petitioner depositing the entire tax demand within a period of four weeks from today, the rest of the demand shall remain stayed during the pendency of the writ petition.”

Creation of Cadre of Officers for CIT(A) not Mandatory Scheme of Income Tax Act: Allahabad HC Dismisses Challenge on Appointment of CIT(A) Ms. Shweta Punj vs Union Of India And 4 Others 2023 TAXSCAN (HC) 1151

In a recent decision the Allahabad High Court observed that the Creation of cadre of officers for Commissioner of Income Tax (Appeals) (CIT (A)) not mandatory scheme of the Income Tax Act, 1961 and dismissed the challenge on appointment of the Commissioner of Income Tax (Appeals) (CIT (A)). We find that the statute, i.e. the Income Tax Act is a self contained code which clearly vests jurisdiction with the Central Government to appoint such persons as it thinks fit to be income tax authorities as are specified in Section 116 of the Income Tax Act. The income tax authorities clearly include Commissioners of Income-tax (Appeals) and, therefore, the Central Government would have the jurisdiction to appoint an officer as Commissioner of Income-tax (Appeals). Officers belonging to the cadre of Indian Revenue Services have been appointed as Commissioner of Income-tax (Appeals)” the Court said. 

Supreme Court Directs Income Tax Dept to Pay Rs. 1.5L as Cost to Western Union: Directs Re-Adjudication of Tax Appeals DIRECTOR OF INCOME vs WESTERN UNION FINANCIAL SERVICES INC 2023 TAXSCAN (SC) 199

In a recent ruling, the Supreme Court of India had directed the Income Tax department to pay Rs 1,5 Lakhs of the total cost to Western Union Financial Services inc and directed re-adjudication of tax appeals.  The Court restored the appeals before the High Court with a cost of Rs.50,000/- (Rupees fifty thousand only) to be paid by the appellant to the respondents in each of these appeals within a period of four weeks from today. Further held that unless the cost is paid to the respondent, the High Court on remand shall not take up the appeals for consideration on merits. 

Taxability of Royalty Paid to Foreign Companies: Supreme Court Upholds Legality of Engineering Analysis Case, Dismisses SLP COMMISSIONER OF INCOME TAX vs M/S GRACEMAC CORPORATION 2023 TAXSCAN (SC) 200

Dismissing a Special Leave Petition (SLP), the Supreme Court of India upheld the legality of the Engineering Analysis case in the matter of taxability of the royalty paid to foreign companies. The Court further noted that the decision in Engineering Analysis Centre of Excellence Private Limited is holding the field. In the event, the aforesaid decision is overruled, that cannot have a bearing on the present case, as it will have an impact only on the judgment passed in Engineering Analysis Centre of Excellence Private Limited (supra) and the cases to be decided thereafter. 

Time Limit for Filing ITC under APGST Act not Ultravires Constitution, Mere Acceptance of Form GSTR-3B Returns will not Release Delay in Filing ITC: AP HC ThirumalakondaPlywoods vs Assistant Commissioner – State Tax 2023 TAXSCAN (HC) 1159

In a recent decision the Andhra Pradesh High Court ruled that the Time limit for filing Input Tax Credit (ITC) under the Andhra Pradesh General Sales Tax Act, 2017 (APGST Act) is not ultravires the Constitution of India and mere acceptance of Form GSTR-3B returns will not release delay in filing ITC. A Division Bench comprising Justices U Durga Prasad Rao and T Mallikarjuna Rao held that the time limit prescribed for claiming ITC under Section 16(4) of APGST Act/CGST Act, 2017 is not violative of Articles 14, 19(1)(g) and 300-A of the Constitution of India. Section 16(2) of APGST/CGST Act, 2017 has no overriding effect on Section 16(4) of the said Act as both are not contradictory with each other. They will operate independently. 

No TDS Deduction on Vodafone Idea for Inter-Connectivity Usage & Bandwidth Charges: Karnataka HC M/s. VODAFONE IDEA LIMITED vs DEPUTY DIRECTOR OF INCOME TAX 2023 TAXSCAN (HC) 1161 

The Karnataka High Court has held that no Tax Deduct at Source(TDS) deduction on Vodafone Idea for inter-connectivity usage & bandwidth charges.  The division bench comprising of Justice P.S. Dinesh Kumar and Justice Ramachandra D. Huddar has held that since the assessee was entitled to the benefits under the Double Taxation Avoidance Agreement (DTAA), it was not liable to deduct tax at source.

Delhi High Court reprimands GST authority for Unnecessarily Delaying Case M/S JUPITER EXPORTS vs COMMISSIONER OF GST 2023 TAXSCAN (HC) 1160

The Delhi High Court has reprimanded the Goods and Service Tax (GST) authority for unnecessarily delaying the case.    Further held that the order be also sent to the Commissioner of GST, Department of Trade and Taxes, Vyapar Bhawan, IP Estate, New Delhi for necessary information and compliance and if it is found that there is dereliction of duties on the part of the concerned officer, appropriate action for recovery of the amount from the salary of the officer be taken.  

Personal Hearing cannot be Denied to Taxpayer on ground of Mere Mentioning “No” in GSTDRC-06: Orissa HC Allows Re-Hearing Arati Behera vs State Tax Officer 2023 TAXSCAN (HC) 1163

In the significant case, the Orissa High Court held that personal hearing could not be denied to taxpayers on grounds of mere mentioning “No” in GST DRC-06. Hence the court directed the adjudication authority for  rehearing the issue.  After reviewing the facts and submissions of the both parties, a division bench of Justice B.R. Sarangi and Justice Murahari Sri Raman quashed the order passed under Section 73 of the Odisha Goods & Services Tax Act and directed the authority to give opportunity of hearing to the petitioner in conformity with the provisions of law.

Assessing Authority is Duly Empowered to Call for Records and to Verify ITC as Claimed under DVAT Act: Delhi HC Dismisses Appeal claiming Malafide M/S CHITRA HARDWARE vs COMMISSIONER OF VAT & ANR 2023 TAXSCAN (HC) 1169

The Delhi High Court observed that the Assessing Authority is duly empowered to call for records and to verify Input Tax Credit (ITC) as claimed under Delhi Value Added Tax Act, 2004 (DVAT Act).  It is well-settled that in case mala fides are alleged, the same has to be specifically pleaded with full particulars. The scope of the appeal, in the present case, is limited to examining the substantial questions of law that arise in the matter” the Court said. 

Death of Noticee before Initiation of Proceeding u/s 148A(b) of Income Tax Act: Calcutta HC set aside the Assessment Order Mr. Sushil Kumar Gupta vs Income Tax Officer 2023 TAXSCAN (HC) 1165

In a recent case, the Calcutta High Court set aside the assessment order as, the death of the noticee happened before the initiation of proceeding under section 148 A(b) of the Income Tax Act, 1961. A single-judge bench comprising Justice Md. Nizamuddin set aside the aforesaid impugned assessment proceeding including the assessment order dated 28th March 2023 with liberty to the Assessing officer concerned to initiate any fresh proceeding by law. 

Relief to CCTEB India: Delhi HC Releases Provisionally Attached Rs 42 Crores Available as Fixed Deposit CCTEB INDIA PRIVATE LIMITED vs ASSISTANT COMMISSIONER OF INCOME 2023 TAXSCAN (HC) 1167

In a major relief to CCTEB India Private Limited, the Delhi High Court released provisionally attached Rs 42 crores available as Fixed Deposit. The Court further added that the Commissioner of Income Tax (Appeals) [“CIT(A)”] will hear and adjudicate the appeal preferred against the assessment order, on merits. Needless to add, once deposit is made by the petitioner, no coercive measures will be taken against the petitioner, till the disposal of the appeal. 

Misinformation regarding PAN number Provided to AO triggers Reassessment Proceedings: Delhi HC sets aside Reassessment Order MS RAJ JAIN vs INCOME TAX OFFICER WARD 35 1 DELHI AND ANR 2023 TAXSCAN (HC) 1171

A Division Bench of Delhi High Court set aside the reassessment order passed under Section 148A(d) of the Income Tax Act, 1961 on grounds of misinformation regarding the Permanent Account Number (PAN) was provided to the Assessing Officer (AO) and the same triggers for the reassessment proceedings. It was further mentioned that if the petitioner provides the necessary material or information, they will be granted an opportunity to submit a response. Sufficient time will be provided for this purpose.

Allahabad High Court Releases Ashish Kakkar on Bail Amidst Allegations of Forged GST Forms and Illegitimate ITC, Citing Ambiguous Arrest Memo  Ashish Kakkar vs Union Of India And Another 2023 TAXSCAN (HC) 1172

The Allahabad High Court has granted bail to Ashish Kakkar, who was arrested in a GST Fraud case on charges of creating 92 fake GST Forms and passing off illegitimate Input Tax Credit (ITC) amounting to a staggering Rs. 88 crores citing ambiguity and lack of clarity in the arrest memo issued against him. In conclusion, the Allahabad High Court highlighted the importance of upholding procedural safeguards in arrests made under the CGST Act and also emphasised the need for clarity and compliance with statutory provisions while arresting an individual protecting individual liberties.

Relief to Blackberry India: Delhi HC rules Services Except in Rule 3(1) of Export of Services Rules falls under Ambit of Export of Taxable Services PR. COMMISSIONER vs BLACKBERRY INDIA PRIVATE LIMITED 2023 TAXSCAN (HC) 1173

In a major relief to Blackberry India Private Limited, the Delhi High Court ruled that services except in Rule 3(1) of Export of Services Rules falls under ambit of Export of Taxable Services. The CESTAT has rightly concluded that all services except those specifically mentioned in Rule 3(1) of the Export of Services Rules, 2005 are covered within the scope of Export of Taxable Services. The Adjudicating Authority had clearly misread the said Rule” the Court concluded.

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